I'm a privacy pragmatist, writing about the intersection of law, technology, social media and our personal information. If you have story ideas or tips, e-mail me at khill@forbes.com. PGP key here.
These days, I'm a senior online editor at Forbes. I was previously an editor at Above the Law, a legal blog, relying on the legal knowledge gained from two years working for corporate law firm Covington & Burling -- a Cliff's Notes version of law school.
In the past, I've been found slaving away as an intern in midtown Manhattan at The Week Magazine, in Hong Kong at the International Herald Tribune, and in D.C. at the Washington Examiner. I also spent a few years traveling the world managing educational programs for international journalists for the National Press Foundation.
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Could Target Sell Its 'Pregnancy Prediction Score'?

Thanks to the New York Times, we now know that Target has a system for figuring out which of its shoppers are knocked up. As Charles Duhigg, an expert in habit formation, makes clear, this is extremely valuable data as new parents tend to get hooked on certain brands and become loyal customers during the first few years of a child’s life — when they’re like the cookie monsters of kids’ goods.

Target assigns every one of its customers a “pregnancy prediction score,” with an estimate of the due date, so that coupons can be timed to the right stage of pregnancy (e.g., maternity ware in the second trimester, placenta teddy bears near the end of the third). Other pregnancy-product companies would surely love to have access to this data. Or, more nefariously, employers who might want to avoid hiring a mother-to-be. Could Target sell it to them?

Target’s privacy policy is as flexible as a mother’s belly is stretchable. It explains that Target tracks everything you do in its stores, on its websites and on its social media channels. In describing who it shares customer info with, Target includes “other companies for marketing purposes.”

“We may share information with vendors, business partners and other organizations which are not part of the Target family,” says the policy. “These companies and organizations may use the information we share to provide special offers and opportunities to you.”

Such as the opportunity to buy baby products?

Target did not respond to a press inquiry, so I don’t know if Target specifically shares its ‘preggers score’ with other companies. But hypothetically, it could; it’s clear from its privacy policy that it’s an option, assuming Target thought it was a worthwhile deal to sell it.

This is how our information can so easily migrate out into the world of data brokers. In this case, health privacy laws don’t play a role, because Target is not a health-care provider.

“Like many companies, we use research tools that help us understand guest shopping trends and preferences so that we can give our guests offers and promotions that are relevant to them,” says a Target spokesperson. “Guests are always welcome to opt out of our marketing programs.”

Mason Weisz, a privacy attorney at Hunton & Williams, would not discuss the Target case specifically, but said that generally, there’s little holding companies back from sharing this type of data.

“In the U.S., the legal environment around data sharing is pretty forgiving,” said Wiesz. “The law recognizes that it’s perfectly normal for companies to try to get to know their customers better and try to market to them in a strategic way.”

He says there are few legal restrictions on the sharing of personal information for marketing purposes. A company only needs to make sure that its actions are consistent with its own privacy notice.

“If you plan ahead [in drafting the privacy policy], you shouldn’t have a problem,” said Weisz. Of course, most Target stores don’t have the privacy notice posted at the cash register, and aren’t required to.

Theoretically, Target could offer an opt-out — and let its customers who are perturbed by this analysis of their behavior say so — but it’s not required nationally. While customers can’t opt out of their data being tracked, they can opt out of it being used to market to them.

Weisz says, though, that the laissez-faire attitude around personal data and marketing is going to change.

“If you were to write this piece in 5 years, it would be different,” he says. “There will be a federal law in the next few years that addresses the use of personal information for marketing purposes and it may well impact these kinds of practices.”

There’s a huge debate in Washington, D.C. right now about how regulated data collection and sharing should be. “I think there needs to be a recognition that companies need to leverage data to connect with their customers,” says Weisz. One proposal that wouldn’t get in the way of that lever, but could harm a lot of existing data broker businesses, would be to restrict companies from passing along information to third-party marketers without a customer’s explicit consent.

Julie Brill of the Federal Trade Commission has suggested that data brokers offer people a way to figure out what companies know about them — and to correct errors in those databanks. What if, for example, Target decided you were pregnant when you weren’t, or kept sending you well-timed baby and child product coupons after you’d had a miscarriage? At this point, there’s no way for you to let them know if they’re wrong.

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Information is power. Always has been and always will be. Personally identifiable customer information empowers businesses to better compete and provide customers with timely and more desired services and products. Data collection is in part why information on the web is mostly free of charge. But consumers are now becoming aware of the privacy trade offs inherent in the multi-billion dollar data mining industry. Whether this information translates into consumer outrage and an exercise of political power to address legitimate privacy concerns remains to be seen. Congress likely will eventually regulate the collection, use and storage of personally identifiable information (industry efforts to self regulate have had mixed success), but whether the regulation has a pro-consumer or pro-business slant will largely depend on where people come down on the competing scale of convenience versus privacy. Many academics, NGO’s and privacy advocates are sounding the call to arms, invoking the spectre of “big brother” (business or government) monitoring our every waking moment and activities. But for many citizens, giving away a little privacy in exchange for a great coupon or discount on their favorite product is a trade they are willing to make. The transformative impact of technology on privacy is a fascinating topic and one my University of utah Honors Think Tank has been examining for the past several months. If you want a collection of great readings, videos and other resources on the issues of transparency and privacy check out the course website at http://campuslibguides.utah.edu/honors.

I take a certain pleasure in confirming my suspicion that with every coupon, click, and convenience, comes intrusion. It really adds to my confusion as to people’s concerns with Facebook. Privacy, for better or worse, has been permanently redefined. I natter more here: http://heresheisboys.com/2012/02/05/u-nidentifiedf-acebooko-bjections/

Mason Weisz offers a good example how following legally correct advise can be bad for business. Retailer use of analytics is neither new nor unjust, so long as they don’t unilaterally disclose the information to a third party. Other industries track consumer behaviors in even greater detail (e.g., property and casualty insurers, health insurance plans — another lawyer, Aetna’s Chairman John Filer was outspoken in favor of corporate responsibility). Those other industries long ago took the pledge to not disclose, and few concerns or complaints persist there.

Retail’s challenge has more to do with how they use the insights. Advertising to and couponing consumers can be more of an affront than good service (… and both often imply a third-party disclosure to hit a retailer’s willingness-to-spend cost levels). Instead, retailers need mechanisms that shoppers will welcome as helpful and discrete uses of not only the information but also the intimacy of the relationship each shopper has chosen, to varying degrees, to develop with a brand. Such new mechanisms need to create more value than a 3% redemption rate of coupons.

Some companies (ours included) are hard at work creating opportunities to serve shoppers with at least as much personalized sensitivity in-store as is possible in online stores. Behavioral analytics are part of the answer, as are other forms of tracking. Early results point to higher revenue productivity per square foot without throwing consumer privacy (further) under the bus, in the least. We have respecting privacy at the foundation of our work.

Retailers can leverage the analytic insights without violating individuals privacy and without “creeping-out” anyone. That is a much different strategy than what the Googles of the world pursue for how people should act and believe in their view of the world. Consumers are right to be concerned that, in a Google and Amazon world, privacy will be dead and all retail stores will be but showrooms.

Luckily, American ingenuity is working on better mousetraps and not just giving in or up on a seemingly difficult problem.

Congrats on that last article going a bit viral. I come back to work from a long weekend, and you’ve got over 1mm views and hundreds of comments…and without any references to racism, abuse, or sex! (unless pregnancy sells as well as sex does, which I doubt)

Interesting article. How much do you think companies would actually pay for this type of information? I know I definitely switched brands when I was pregnant to products I felt were safer. Coupons definitely helped though.